KB Home subdivision to feature smaller floor plans

Planners cite housing market slowdown

By TOM PFINGSTEN - Staff Writer | Tuesday, March 25, 2008 5:37 PM PDT ∞

FALLBROOK ---- Planners said Tuesday that the sharp downturn in real estate demand has prompted a developer to scale back some of the upscale homes in a subdivision under construction off Stage Coach Lane.

Officials with KB Home said they plan to shrink the size of many of the homes they are trying to sell at "Shady Grove," the proposed 101-home development at Stage Coach and Gum Tree Lane.

To date, only a handful of houses in the subdivision has been built, along with a small park and residential streets throughout the neighborhood. Officials said the developer has had difficulty selling spacious floor plans that were originally priced upward of $700,000.

Original floor plans ranged in size from 2,250 to 3,400 square feet. The new batch of floor plans under consideration range from 1,690 to 2,275 square feet, according to the March 17 Fallbrook Planning Group agenda.

A company spokeswoman declined Tuesday to estimate how much the smaller homes would cost. But using the square-footage pricing of the old floor plans, the new models would probably cost somewhere between $400,000 and $500,000. The spokeswoman said that it was not known whether the number of homes might also be reduced.

The entire county and region are experiencing a similar drop in demand for larger homes and real estate in general.

In February, builders were issued 146 permits to build new single-family homes in San Diego County, down 52 percent from a year ago, according to data from the Construction Industry Research Board. That is also the lowest total since 1992, according to the board, an industry group based in Burbank.

Lindsay Stephenson, a spokeswoman with KB Home, said Tuesday that the company filed last week for a site plan modification that reflects the smaller homes.

She said the reduced floor plans would be phased in and that some of the larger homes would still be built in parts of the neighborhood that are already developed, in order to avoid having drastic size differences on the same block.

Eileen Delaney, a member of the Fallbrook Planning Group, said it's understandable that a developer would want to build smaller houses that are easier to sell, given the current state of the housing market.

"They figure it would be a better thing if they had smaller homes ---- that they'd be able to market them better," Delaney said.

From a planning perspective, the smaller homes would fit better on the lots because there would be more room between the houses, Delaney said.

She said only eight homes out of the proposed 101 homes have been sold.

"We were a little concerned about how those who already had homes there would fit in, but they're in a different area," she said of those who purchased the larger floor plans.

Some homes at Shady Grove were originally listed at more than $800,000, but the housing market slump has taken its toll. On Tuesday, the largest home at Shady Grove was listed at 3,400 square feet and $676,000.

KB Home, which specializes in built-to-order houses, built 23,743 homes nationwide in 2007 and earned $6.4 billion in revenue, according to company figures.

But year-over-year figures released in a January report show the company has been hit hard by the housing market downturn: In the fiscal quarter that ended in November, the builder reported $2.07 billion in revenue, down from $3.01 billion during the same period in 2006.

The report also said the average price of one of KB Home's dwellings decreased to $248,000 in 2007 from $280,000 in 2006 ---- a decline of 12 percent.

Still, the company seems committed to building the rest of its Fallbrook subdivision, which it has been pursuing for about five years. KB Home paid for two months' worth of road work on Stage Coach and Gum Tree last summer, raising the intersection 8 feet and widening both roads.

Contact staff writer Tom Pfingsten at (760) 740-3516 or tpfingsten@nctimes.com. Comment at nctimes.com.

First name only. Comments including last names, contact addresses, e-mail addresses or phone numbers will be deleted. Attempts to misrepresent your identity or impersonate any person will not be approved. All comments are screened before they appear online, so please keep them brief. Comments reflect the views of those commenting and not necessarily those of the North County Times or its staff writers. Click here to view additional comment policies.